Bad Debts – Quick Guide (Sales / AR / FM)
Scope: Short Cash & Company Credit customers – from monthly statements to Bad Debts Report (BDR). Use this page as a field reference; the master rules remain in the SOP & Credit Policy.
Monthly Timeline
- D+1–D+5: AR issues Short Cash Statement (per Salesman) incl. invoice‑level details, Days Remaining, and totals per Aging Buckets with amounts & %.
- By D+15: Salesman submits Monthly Outstanding Declaration (signed by Supervisor/Area Manager). Missing by 15th ⇒ Salesman suspension (route continues with an alternate).
- D+16 → Month End: Follow‑up by Age × Exposure. AR shares weekly dashboard to FM/GM.
Age × Exposure – Actions & Escalation
| Aging | Short Cash | Company Credit | Owner(s) |
|---|---|---|---|
| 0–15 days | Call customer; document in ERP; set next action date. | Courtesy reminder (+5 written); schedule visit if needed. | Salesman + Supervisor |
| >15–30 days | Open case file (ID). If delay persists → convert to Pure Cash. | Continue dunning; reassess exposure/terms. | Supervisor + Channel Manager |
| >30–60 days | Escalation visit by Sales Director & PRO. Initiate asset removal (coolers/displays). MeM to capture evidence (photos/serials/forms/timestamps). Open police case if applicable. | Sales Director + PRO + MeM | |
| >60 days | Prepare Bad Debts Report (BDR) and submit to FM & GM for decision (provision/legal/write‑off; KPI Ratio Rate if approved). | AR (prep) + FM (review) + GM (approve) | |
High‑Risk Alert (Immediate)
Any sign of potential loss at any age ⇒ send alert within 24h to Accounting, FM, SD, GM (use Annex D template).
Blocking & Reinstatement (Summary)
| Rule | Reinstatement | |
|---|---|---|
| Short Cash | Any breach ⇒ auto block. Delay >15d ⇒ convert to Pure Cash. Three+ violations ⇒ Permanent Cash. | After full payment realization; per DoA. |
| Company Credit | Breach ⇒ auto/manual block. Delay >45d ⇒ DoA required to continue credit. | After full payment realization + DoA. |
Evidence & Documentation – Minimum Pack
- Contact logs (calls/messages), signed visit reports, commitment notes.
- Emails/WhatsApp exports (if used), bank confirmations, POD.
- MeM asset evidence (photos, serials, handover forms; custody log) when removal occurs.
- Naming:
[CaseID]_[CustomerCode]_[InvoiceNo]_[YYYYMMDD]_[DocType]· Retention: 7 years.
RACI – Quick View
| Activity | R | A | C | I |
|---|---|---|---|---|
| Monthly Short Cash Statement | AR | AR | FM | GM |
| Declaration (Short Cash) | Salesman | Supervisor | AR | FM/GM |
| 15–30 Visit | Supervisor & Channel Manager | Supervisor & Channel Manager | SD | FM/GM |
| 30–60 Escalation Visit | Sales Director | Sales Director | PRO/AR | FM/GM |
| Asset Removal Evidence | MeM | MeM | SD/AR | FM/GM |
| BDR Preparation & Approvals | AR | FM/GM | SD | HR/BI |
Note: This guide summarizes the SOP content for quick action. Always refer to the full SOP for detailed steps, exceptions and DoA rules.